NEED HELP ON B-C

Oriole, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. "Survival of the fittest, I say!" was his response when the Weak division's manager, insisted William, that his division earned money for the company. Following is the most recent financial analysis for each division:

		Weak			Average		Strong
Sales revenue		$125,200			$447,000		$524,500
Variable expenses		55,000			245,400		302,200
Contribution margin		70,200			201,600		222,300
Direct expenses		32,900			75,100		116,600
Allocated expenses		67,800			67,800		67,800
Operating income		$(30,500)			$58,700		$37,900

(a)

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Prepare a revised income statement showing the segment margin for each division.

		Weak		Average		Strong		Total
select an income statement item Operating incomeSegment marginSalesContribution marginAllocated expenseVariable expenseDirect costs		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select an income statement item Direct expenseAllocated expenseSegment marginSalesOperating incomeContribution marginVariable expense		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part SalesDirect expenseVariable expenseContribution marginSegment marginAllocated expenseOperating income		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part
select an income statement item Contribution marginDirect expenseAllocated expenseSalesOperating incomeSegment marginVariable expense		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the second part Contribution marginAllocated expenseSalesVariable expenseDirect expenseOperating incomeSegment margin		$enter a total amount for the second part		$enter a total amount for the second part		$enter a total amount for the second part		enter a total amount for the second part
select an income statement item Allocated expenseOperating incomeContribution marginSalesSegment marginVariable expenseDirect expense								enter a dollar amount
select a closing name for this statement Segment marginDirect expenseAllocated expenseSalesContribution marginVariable expenseOperating income								$enter a total amount for this statement

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(b)

By how much would total income change if the Weak division were dropped?

Total income will select an option increasedecrease by $enter a dollar amount .

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(c)

Based on the way allocated expenses are divided among the divisions, what do you think will happen to the Average division if the company continues to prepare financial statements in this way, assuming Weak was dropped?

If Weak is dropped, then Average will report allocated expenses of $enter a dollar amount , resulting in an select an option operating incomeoperating loss